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UnitedHealth Reaffirms 2025 EPS Guidance: Time to Buy or Wait?
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Key Takeaways
UnitedHealth reaffirmed its 2025 EPS guidance despite dilution from the Amedisys deal.
Analysts cut UNH earnings estimates, projecting EPS to fall even as revenue climbs.
UNH faces rising medical loss ratios, regulatory probes and a steep share price drop.
UnitedHealth Group Incorporated (UNH - Free Report) is set to reaffirm its 2025 adjusted EPS outlook in upcoming meetings with investors and analysts, even as the recent Amedisys acquisition is expected to be “modestly dilutive” to earnings because of financing and integration expenses. The deal closed in August. Investors welcomed the update, sending shares up 1.5% yesterday.
Back on July 29, UnitedHealth issued the fresh guidance for 2025, projecting adjusted EPS of at least $16 on revenues of $445.5-$448 billion. The outlook comes at a time when rising medical costs are straining margins across the industry, forcing not only UNH but also companies like Molina Healthcare, Inc. (MOH - Free Report) and Centene Corporation (CNC - Free Report) to lower their 2025 forecasts.
Unfavorable Estimate Revisions for UNH
Analyst sentiment has been tepid. Over the past month, there have been two downward revisions to UnitedHealth’s 2025 and 2026 earnings estimates, with no upward adjustments. The Zacks Consensus now suggests a steep 41.4% decline in 2025 EPS to $16.21, though revenue is still expected to climb more than 12% year over year. This disconnect underscores analysts’ doubts about whether UnitedHealth can successfully convert the top-line growth into sustainable profit.
The company’s mixed record doesn’t help: it missed estimates in two of the last four quarters, beating in the other two, with an average earnings surprise of negative 3.3%.
UnitedHealth Group Incorporated Price, Consensus and EPS Surprise
Per the recent filing, this week’s meetings may also highlight UnitedHealth’s broader strategy, positioning and performance. That could provide clarity at a time when the company’s hurdles extend beyond earnings. It was removed from major Russell growth indices, faces rising high-acuity care volumes, worsening Medicare Advantage dynamics and a climbing medical loss ratio. That ratio has jumped from 83.2% in 2023 to 85.5% in 2024 and further to 89.4% in the second quarter of 2025, leaving less margin after claims are paid.
Regulatory and legal issues further complicate the picture. UNH is already facing probes from the Justice Department into its Medicare billing practices, reimbursement policies and Optum Rx’s pharmacy benefit operations. Recently, questions were raised about how it handled loans to healthcare providers following the 2024 Change Healthcare cyberattack.
It extended billions in temporary loans to keep providers afloat as the cyberattack disrupted claims processing. However, lawmakers now argue that the company has taken an aggressive stance on repayments, which may have added strain to financially fragile hospitals and physician groups through no fault of their own.
Adding to the uncertainty, President Donald Trump’s “most-favored nation” executive order could disrupt the PBM model, potentially reshaping how Optum Rx operates.
UNH’s YTD Price Performance & Valuation
The stock has reflected these headwinds. UNH shares have tumbled 36.7% year to date, worse than the industry’s 29.5% decline. Molina and Centene fared even worse, losing 39.7% and 52.4%, respectively, while the S&P 500 has advanced 10.8% over the same stretch.
Price Performance – UNH, MOH, CNC, Industry & S&P 500
Image Source: Zacks Investment Research
Despite the price decline, UNH’s valuation remains elevated. It trades at a forward P/E ratio of 18.72X, above the industry average of 15.23X. In contrast, Molina Healthcare and Centene appear cheaper, trading at forward P/E multiples of 9.12X and 11.37X, respectively.
Image Source: Zacks Investment Research
Long-Term Strength Still Intact?
Despite the challenges, the company maintains a dominant position in the U.S. healthcare sector, supported by scale, diversification and a vast customer base. As of June 30, 2025, its UnitedHealthcare arm served 50.1 million people, up 2.1% year over year, with growth led by self-funded commercial plans. Management has acknowledged the current headwinds and is moving to stabilize operations.
Confidence also came from Warren Buffett’s Berkshire Hathaway Inc. (BRK.B - Free Report) , which disclosed a $1.57 billion purchase of more than 5 million shares, prompting a wave of follow-on buying from institutions and retail investors.
Looking forward, several potential tailwinds stand out. Medicare Advantage rate hikes expected in 2026 may ease margin pressure. UnitedHealth is also accelerating its use of AI and digital tools to improve efficiency and curb costs. Meanwhile, broader healthcare spending in the U.S. continues to increase, driven by an aging population and the rising prevalence of chronic illnesses, structural trends that favor the company.
Conclusion
UnitedHealth still remains a key player in U.S. healthcare, but its near-term outlook is weighed down by rising medical costs, regulatory probes, unfavorable estimate revisions and margin pressures that show little sign of easing. The stock has already shed more than a third of its value this year, yet still trades at a premium valuation compared with peers, leaving little room for growth.
With earnings under pressure, sentiment firmly negative, and recovery catalysts still some distance away, UnitedHealth faces a prolonged uphill battle. Reflecting these challenges, the stock carries a Zacks Rank #5 (Strong Sell), suggesting investors may want to step aside for now.
Image: Bigstock
UnitedHealth Reaffirms 2025 EPS Guidance: Time to Buy or Wait?
Key Takeaways
UnitedHealth Group Incorporated (UNH - Free Report) is set to reaffirm its 2025 adjusted EPS outlook in upcoming meetings with investors and analysts, even as the recent Amedisys acquisition is expected to be “modestly dilutive” to earnings because of financing and integration expenses. The deal closed in August. Investors welcomed the update, sending shares up 1.5% yesterday.
Back on July 29, UnitedHealth issued the fresh guidance for 2025, projecting adjusted EPS of at least $16 on revenues of $445.5-$448 billion. The outlook comes at a time when rising medical costs are straining margins across the industry, forcing not only UNH but also companies like Molina Healthcare, Inc. (MOH - Free Report) and Centene Corporation (CNC - Free Report) to lower their 2025 forecasts.
Unfavorable Estimate Revisions for UNH
Analyst sentiment has been tepid. Over the past month, there have been two downward revisions to UnitedHealth’s 2025 and 2026 earnings estimates, with no upward adjustments. The Zacks Consensus now suggests a steep 41.4% decline in 2025 EPS to $16.21, though revenue is still expected to climb more than 12% year over year. This disconnect underscores analysts’ doubts about whether UnitedHealth can successfully convert the top-line growth into sustainable profit.
The company’s mixed record doesn’t help: it missed estimates in two of the last four quarters, beating in the other two, with an average earnings surprise of negative 3.3%.
UnitedHealth Group Incorporated Price, Consensus and EPS Surprise
UnitedHealth Group Incorporated price-consensus-eps-surprise-chart | UnitedHealth Group Incorporated Quote
A Tough & Long Fight Ahead for UNH
Per the recent filing, this week’s meetings may also highlight UnitedHealth’s broader strategy, positioning and performance. That could provide clarity at a time when the company’s hurdles extend beyond earnings. It was removed from major Russell growth indices, faces rising high-acuity care volumes, worsening Medicare Advantage dynamics and a climbing medical loss ratio. That ratio has jumped from 83.2% in 2023 to 85.5% in 2024 and further to 89.4% in the second quarter of 2025, leaving less margin after claims are paid.
Regulatory and legal issues further complicate the picture. UNH is already facing probes from the Justice Department into its Medicare billing practices, reimbursement policies and Optum Rx’s pharmacy benefit operations. Recently, questions were raised about how it handled loans to healthcare providers following the 2024 Change Healthcare cyberattack.
It extended billions in temporary loans to keep providers afloat as the cyberattack disrupted claims processing. However, lawmakers now argue that the company has taken an aggressive stance on repayments, which may have added strain to financially fragile hospitals and physician groups through no fault of their own.
Adding to the uncertainty, President Donald Trump’s “most-favored nation” executive order could disrupt the PBM model, potentially reshaping how Optum Rx operates.
UNH’s YTD Price Performance & Valuation
The stock has reflected these headwinds. UNH shares have tumbled 36.7% year to date, worse than the industry’s 29.5% decline. Molina and Centene fared even worse, losing 39.7% and 52.4%, respectively, while the S&P 500 has advanced 10.8% over the same stretch.
Price Performance – UNH, MOH, CNC, Industry & S&P 500
Despite the price decline, UNH’s valuation remains elevated. It trades at a forward P/E ratio of 18.72X, above the industry average of 15.23X. In contrast, Molina Healthcare and Centene appear cheaper, trading at forward P/E multiples of 9.12X and 11.37X, respectively.
Long-Term Strength Still Intact?
Despite the challenges, the company maintains a dominant position in the U.S. healthcare sector, supported by scale, diversification and a vast customer base. As of June 30, 2025, its UnitedHealthcare arm served 50.1 million people, up 2.1% year over year, with growth led by self-funded commercial plans. Management has acknowledged the current headwinds and is moving to stabilize operations.
Confidence also came from Warren Buffett’s Berkshire Hathaway Inc. (BRK.B - Free Report) , which disclosed a $1.57 billion purchase of more than 5 million shares, prompting a wave of follow-on buying from institutions and retail investors.
Looking forward, several potential tailwinds stand out. Medicare Advantage rate hikes expected in 2026 may ease margin pressure. UnitedHealth is also accelerating its use of AI and digital tools to improve efficiency and curb costs. Meanwhile, broader healthcare spending in the U.S. continues to increase, driven by an aging population and the rising prevalence of chronic illnesses, structural trends that favor the company.
Conclusion
UnitedHealth still remains a key player in U.S. healthcare, but its near-term outlook is weighed down by rising medical costs, regulatory probes, unfavorable estimate revisions and margin pressures that show little sign of easing. The stock has already shed more than a third of its value this year, yet still trades at a premium valuation compared with peers, leaving little room for growth.
With earnings under pressure, sentiment firmly negative, and recovery catalysts still some distance away, UnitedHealth faces a prolonged uphill battle. Reflecting these challenges, the stock carries a Zacks Rank #5 (Strong Sell), suggesting investors may want to step aside for now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.